Tips to avoid fraud in any investment

I am concerned about the many scams out there under the pretext of investment.Guise of investment gold,stocks,insurance etc.That fraudsters are taking advantage of the majority of Indonesian people who are not educated properly about investment.So that is why this article I wrote (not just for Indonesian)

Investing is easy,you just need simply provide the money and looking for an investment instrument that suitable for you.But what is not easy is to wait for profits.Why did I write “wait” because investing have risk and need time to make a profit.It does not mean that you can not get super huge profits in a very short time,certainly can,for example,investment in futures trading.

But we are not talking about investment instruments and the benefits now,there are three important things that you should know before invest.




1. Investment is risky

Every business and investment have risk buddy.Risks that are referred here is the risk of loss.This is the most important thing that needs to be known by all investorsor potential investors.None of the investments that have no risk,if you find a promotional brochure that offers a risk-free fixed income then just throw it in the garbage.

Investments in bonds,even though government bonds have risks.Just look at government debt crisis in Europe today,especially the Eurozone.Investmenting in gold is also not free from risk.Although gold is famous for its value is stable and resistant to inflation still can make you lose money.

So,the risk in investing is like a coin has two sides that can not be separated.Do not be tempted even fooled by the sales marketing of an investment product that is (usually) only highlight the benefits of the product only.If you still think investing or doing business is risk free,then you need to think about it anymore.Things you should remember about the investment risk is,higher profit that you can earn then higher risk that you can get too.

2. Legality

The second most important thing is legality.Legality in question here is the legality of its investment agency and is registered in the local institutions in the State legulator.If you invest in mutual funds then you have to move on legality / permitthe establishment of the company,then find out that the company is listed on the Bapepam legulator institutions (for Indonesia).Same thing in your country.

Even with a mountain of legal permits from the notary to establish the company,but if not enrolled at the institution legulator then the company is illegal.You can find a list of Indonesian mutual fund companies (investment managers) who are legally here.

3.Mechanism

After understanding the above two things,the last thing you need to know is the mechanism.The mechanism of how the payment,registration,withdrawals,etc.It is recommended that you should not rely solely on information from sales or customer service only.Looking for information on the Internet is a good way but you had better to buy a book,because based on my experience the information in the book more complete.

If you just rely on the sales/marketing or customer service,who knows they are the employees who want to quit their job and want to seek profits by cheating,so when you ask where you should deposit an investment fund,you are told to deposit into a personal account of fraudsters.Just in case man.

Example,if you want to invest in mutual funds it will be more complicated than investing in bank deposits.You have to know where you need to register,you must know the official sales agent,you should know the designated custodian banks authorized by the investment management firm,you have to know where you have to add funds,how to withdrawal funds etc.

Once you know exactly how the mechanism,then ask the investment mechanism to sales/marketing or customer service for confirmation.If there is any information/something strage,then you should be suspicious.

Well,that is all that I can wrote fellas,and I expect no more news about investment fraud.